Philips Healthcare Reduces Global Workforce

Royal Philips Electronics NV is handing out pink slips to 1,600 healthcare employees, representing 5% of its total workforce across the world as the company struggles to maintain its profit on weak outlook.

The world’s largest maker of patient-monitoring systems will cut jobs at its health-care unit that has a global workforce of around 32,000, with most of those employees based in the United States. The company has a total workforce of almost 110,000 employees.

“We want to take all possible measures despite the sluggish economic scenario at present to maintain our profit levels and even improve them if possible,” Arent Jan Hesselink, a spokesman for the Amsterdam-based company, said.

In October, the company posted better-than-anticipated third quarter results and announced that it would reduce the speed of repurchasing shares, citing a drop in sales due to financial market turbulence.

Philips’s net quarterly profit increased to 357 million euros or 0.37 euro per share, compared to 331 million euros, or 30 cents, reported a year ago.

The market analysts were expecting the firm to post a net profit of 352 million euros in the quarter on weak credit market and sluggish growth in consumer spending.

The net sales of the firm were at 6.47 billion euros in the third quarter a year ago. The company attributed the 7.9% rise in net income in the third quarter to the sale of its stakes in Taiwan Semiconductor Manufacturing Co.

The Dutch company had indicated that it will raise some prices and protect margins by speeding up on expense-reduction projects, which will record charges of up to 230 million euros, in the fourth quarter.

Philips’s profit at the health-care division had dropped in the third quarter on lower sales and declining prices for imaging systems in the U.S. The company had invested around 4 billion euros ($5 billion) this year in the health-care unit.

SOURCE: gantdaily.com